Economic Survey 2018: How flow and steady wins the race


Investment for Growing Age 
How to regain 8-10% growth? Reversing the slowdown will call for investment-incentivising policies for large as well as small businesses. Also, the government must think of ways to prune costs of doing businesses and create a transparent and stable tax and regulatory environment. India’s investment decline partly stems from balance sheet stress and there is no evidence of automatic bounce-backs from investment slowdowns.

Let’s Rein In Those Appeals 
The tax office should exercise greater self-restraint by limiting appeals, given its low success rate, says the Survey. There could be rules to limit appeals, for instance, to no more than one in four high court verdicts or no more than one in three arbitration cases. Given the long shadow of the 3 Cs (CBI, CVCand CAG) in inducing bureaucratic riskaversion, an independent panel could be created to decide on further appeals of tax verdicts against the department.

Earn by Heart, Inside & Outside 
Hopefully, higher GST collection and possible pickup in remittances can offset the adverse impact of higher oil prices. According to the Survey, India’s external sector in this and coming year looks bright with world trade projected to grow at 4.2% and 4% in 2017 and 2018, respectively, from 2.4% in 2016. Trade of India’s major partner countries is improving.

Survey Sets Out Priorities 
Mobilising savings by unearthing black money and discouraging purchase of gold are not as urgent as reviving investment.

We’ve Grown Fond of Bonds 
What fuelled the rise in bond yields? First, higher market borrowings by states does not reflect higher deficits — about Rs 50,000 crore of market borrowing is due to changes in the composition of financing. Another factor contributing to the rise in bond yields has been stepped-up Open Market Operations (OMO) by RBI. economictimes